Israel stocks slip back from records

Drugmaker Teva's shares whipsawed in Tel Aviv

By

RobertDaniel

TEL AVIV (MarketWatch) -- Israel stocks retreated from their records levels, hampered by drops in Israel Chemicals and some of the banks in Tuesday's trading.

Teva Pharmaceutical Industries was a standout, whipsawed after reporting better-than-expected earnings. The stock was up as much as 3.2%, then dropped to a loss of more than 2% before finishing up 0.14% at 142.1 shekels ($32.97).

The Tel Aviv Stock Exchange's benchmark TA-25 eased 0.14% to 911.81, and the TA-100 traded down 0.27% at 923.51. Both indexes set records set Monday.

The Tel-Tech 15 index of top technology issues slipped 0.88% to 376.81. The Tel-Tech's highest-ever reading is 482.78, set Jan. 20, 2004.

Teva
TEVA, +1.09%
was the most-active issue, accounting for more than a sixth of the total TASE volume of $433 million. That in turn is 31% above the average daily TASE volume through October of $331 million.

Teva posted third-quarter net income that more than doubled on 74% growth in sales, and the world's largest maker of generic drugs said it would buy back as much as $600 million of its shares and convertible debentures. See full story.

A busy and notable loser was Israel Chemicals, trading off 1.4% at 25.03 shekels ($5.81).

Analyst Joseph Wolf at UBS downgraded ICL to neutral from buy while raising his price target to 26 shekels from 24. While "we are aware of the positive momentum in both the potash and bromine businesses and stocks, and we still see some upside ... The stock has moved a little too far a little too fast," Wolf wrote in a note.

Bank Hapoalim moved less than 0.1% higher at 21.53 shekels. Merrill Lynch on Monday reiterated its buy rating, calling Bank Hapoalim "our preferred way of investing in domestic macroeconomic and social trends."

Running down the rest of the action in the sector, Bank Leumi lost 0.4% at 18.07 shekels and Bank Discount moved down 0.4% at 8.84 shekels, but Bank Mizrachi Tefahot was on the rise, adding 3% to 30.53 shekels.

The Tel Aviv Finance index finished up 0.27% at 1,210.42. It includes those four banks as well as Union Bank, up 0.5% at 22.6 shekels, and First International Bank Issue 5, down 0.3% at 59.32 shekels.

Within the TA-25, shares of Partner Communications
PTNR, -1.91%
added 0.7 to 48.69 shekels. The Israel affiliate of the Orange cellular network saw its price target raised to 52 shekels from 45.5 shekels at Clal Finance Batucha, which rates the stock outperform.

And among the holding companies, Discount Investments shed 0.3% to 118.8 shekels, IDB Development fell 0.4% to 138 shekels and Koor Industries lost 0.8% to 208.1 shekels.

Tel-Tech tipped a bit

The Tel-Tech took a hit as a result of weakness in AudioCodes
AUDC, -0.32%
shares of which fell 9.3% to 40.57 shekels. The telecom-equipment producer reported third-quarter net income of 2 cents a share against 8 cents in the year-earlier period. Adjusted profit was 8 cents against 8 cents. Revenue rose 35% to $40.1 million.

Also on the move, Elbit Systems
ESLT, +0.09%
fell 1.2% to 132 shekels. The defense contractor was cut to neutral from buy at Israel Brokerage & Investments based on valuation, as the company's U.S.-listed shares reached the broker's target price of $32.

And Tadiran Communications slipped 1.5% to 155.9 shekels. The producer of military-communications equipment reported that third-quarter net income fell 13% as revenue declined 15%. The order book at Sept. 30 totaled $322 million.

Leader & Co. reiterated an outperform rating on Tadiran with a price target of 161 shekels.

Off the Tel-Tech index, Tower Semiconductor Ltd.
TSEM, +0.00%
lost 3.1% to 7.83 shekels. The independent chip foundry swung to third-quarter net income from a net loss as a result of a special gain on a refinancing, as sales more than doubled to $51.5 million. The company also narrowed its operating loss to $28.2 million from $45.5 million.

The Tel Aviv Real Estate index fell 1.1% to 666.96.

The most active issue in the index was Africa Israel Investments
AFIVY
shares of which eased 0.2% to 291.2 shekels. The real-estate developer was reiterated as a buy at UBS, which cited the company's increase in its stake in a Russian joint venture to 88% from 80% and its plan to expand the operation and take it public.

Electra Real Estate was down 2.5% at 68.06 shekels, shrugging off the company's report that third-quarter earnings more than doubled. And Gazit Globe dropped 2% to 54.19 shekels.

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